Md. stadiums chief warns team in D.C. could affect state coffers

Lag in Orioles attendance could force the agency to seek more state funds

September 28, 2004|By Jon Morgan | Jon Morgan,SUN STAFF

If a rival team lands in Washington and siphons baseball fans from the Orioles, that could hurt the agency that operates the team's stadium at Camden Yards and possibly force it to seek additional state funds, its chief warned yesterday.

"The stadium authority is very concerned about the economic impact on the stadium authority and the team," Maryland Stadium Authority Executive Director Alison L. Asti said.

An analysis by the authority shows that if a team in Washington reduces Orioles attendance by 30 percent - a figure that critics dispute and that exceeds the team's own estimates - it could cost the state agency $3 million a year in lost revenue from a ticket tax and other sources.

Fewer fans would also mean an estimated $462,000 in annual savings on cleaning, security and other operating bills for the state, for a net annual loss of about $2.6 million, according to the authority.

If a team does move to Washington, and those figures are proven to be accurate, the agency might have to seek more in lottery revenues to meet its obligations, Asti said. That might mean less money going into the state's general fund.

"These numbers do not include the incalculable economic impact" of a diminished team on the region, she said.

Major League Baseball has discussed ways to protect the Orioles from a potential financial impact from a new competitor in the market, but none is aimed directly at the state - something Asti said she hopes becomes an element in the discussions.

"We are hopeful that baseball could give some consideration to the impact on the state," Asti said.

Andrew Zimbalist, an economist at Smith College and author of Baseball and Billions, said the Orioles would suffer some loss in revenue but not enough to threaten the franchise.

"He's not going to have the advantages he had in the 1990s, but there's no reason he can't build a competitive team," Zimbalist said of team owner Peter G. Angelos.

The stadium authority, which built and operates the twin-stadium Camden Yards complex, pays for its operations and payments on millions of dollars in bonds from several sources. They include annual payments by the teams, a ticket tax, a $1 million annual payment by the City of Baltimore and lottery revenues.

The Orioles' rent is calculated as a percentage of various revenues, from tickets to peanuts, an arrangement created to accommodate federal tax law on public bonds. The stadium authority pays for the operation and maintenance of the park, costs that are rising with the age of the 12-year-old park.

Even in the best years for the team, when it was setting a major league record for consecutive sellouts, the rent fell short by as much as $3 million a year in covering the cost of the park's operation. But the ticket tax paid by fans, which totaled $4.7 million last year, made up the difference.

Asti said the ticket tax might no longer suffice if the team's attendance suffers.

The Orioles have not said their attendance could fall by 30 percent. They have said that nearly 25 percent of their fans come from the Washington metropolitan region, many of whom would presumably be lost to the new team and some of whom would be replaced by new fans. The team says its overall revenues could drop by 30 percent.

Studies by the group trying to lure a team to Northern Virginia estimate that only 13 percent of Orioles ticket buyers live in the Washington area, including Prince George's and Montgomery counties.

Aris Melissaratos, the state's secretary of business and economic development, said, "Even a slight loss of attendance would have an impact beyond the team."

In the long run, the market for baseball might grow enough to accommodate both franchises, he said.

Gov. Robert L. Ehrlich Jr. said last night that he has constituents in both the Baltimore and Washington areas and it is "not my job" to say whether baseball should or should not move a team to the capital.

As the sport's leaders make a decision, Ehrlich said, the economic interest of the Orioles, "must be part of the equation."

Baltimore's City Council considered a resolution last night in opposition to a team moving to Washington or Northern Virginia, but the measure, sponsored by Councilman Kenneth N. Harris Sr., failed to secure enough votes to clear a procedural hurdle to bring the matter to a vote.

Protecting the local sports franchise is no longer a predictable political reflex, say people who follow politics and sports.

Mayor Martin O'Malley, for example, does not oppose a Washington team.

Lenneal J. Henderson, a professor at the University of Baltimore's School of Public Affairs, said O'Malley might be trying to avoid angering citizens in the vote-rich Washington suburbs of Maryland that he might need if he runs for governor.

Staff writers Chris Kaltenbach, Laura Vozzella and Ed Waldman contributed to this article.

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